With India’s 8.2% Gross Domestic Product (GDP) growth rate exceeding the expectations in the second quarter of current financial year, the Chief Economic Adviser (CEA) V Anantha Nageswaran has expressed optimism that India's economic growth will exceed 7% this fiscal (FY26) and the size of the GDP will cross the $4 trillion mark. He said the Economic Survey tabled in Parliament in January had projected real economic growth of 6.3% to 6.8% for FY26. He stated that the country’s GDP, an indicator of the size of the economy, stood at $3.9 trillion at the end of March this year. 

The Indian economy grew by a higher-than-expected 8.2 per cent Q2 FY26 as increased factory production in anticipation of a consumption boost from the GST rate cut helped offset deceleration in farm output. The growth in the second quarter, compared with 7.8 per cent in the preceding three months and 5.6 per cent in the year-ago period, was aided by a strong showing from the services sector, which clocked double-digit growth. He added that improving price dynamics and tax reforms are expected to boost household disposable incomes, strengthening the near-term consumption outlook. He pointed out that improving price dynamics and tax reforms are expected to boost household disposable incomes, strengthening the near-term consumption outlook. 

Besides, he noted that healthy corporate sector balance sheets augur well for sustained private investments in H2 of FY26. Moreover, the rural demand remains resilient while urban demand is gaining traction post-GST rate cut. He said that the favourable agricultural incomes on the back of healthy crop output have continued to strengthen Rural consumption. On the price situation, he said that the core inflation remained stable, while timely Rabi sowing and healthy reservoir levels reinforce a benign food supply outlook. Additionally, ongoing structural reforms, including implementation of Labour Codes, GST rate rationalisation, new Personal Income Tax regime and deregulation initiatives, will continue to enhance efficiency and competitiveness. He added that the confluence of stable inflation, sustained public capex, and reform momentum positions the economy to navigate risks, as reflected in upward revisions to FY26 GDP growth projections by various agencies.